What unique insights do transaction comps provide compared to trading comps?

Transaction comps offer unique insights into control premiums expected in negotiations because they reflect the premiums that acquirers typically pay over the market price of a target company's shares during acquisitions. This is crucial as it indicates how much additional value buyers are willing to pay to gain control over a company, often influenced by synergies, the strategic value of the acquisition, and competitive bidding situations.

While transaction comps focus on actual purchase prices in completed transactions, trading comps analyze how similar companies are valued in the market based on their public trading prices. The control premium aspect of transaction comps captures a perspective that is distinct from simply assessing market values or historical earnings since it emphasizes the additional value attributed to ownership in a transaction context. This can be vital for understanding negotiations and potential acquisition strategies in the investment landscape.